How to get the right home insurance according to an expert

What should homeowners know about home insurance?

Silverstein says home insurance is ultimately about peace of mind. Your home is often the largest investment you’ll make, so you want to ensure both your house and everything inside it can be repaired or replaced if something happens.

While home insurance isn’t legally required, Silverstein points out that it is mandatory if you have a mortgage. He stresses the importance of ensuring your home is adequately insured by accurately assessing the value of the house and its contents. High-value items should be specifically listed on your policy using a rider. He also emphasizes having liability coverage and coverage for additional living expenses if your home becomes uninhabitable.

Silverstein explains that most insurers offer three main types of coverage. Actual cash value covers property and belongings at their depreciated value, meaning payouts are reduced to account for wear and tear, making it the least expensive option. 

 

Replacement cost value coverage pays to replace your home and personal belongings at current market value using the same or similar materials, minus your deductible. Guaranteed or extended replacement cost coverage protects against inflation, which Silverstein says is especially important when building materials increase in cost, since standard replacement coverage may not be enough on its own.

Silverstein says choosing the right coverage starts with understanding the replacement cost of your home, the total value of your belongings, and the value of your overall assets, including vehicles and other high-value items. 

 

Estimates can be obtained from your insurer, through a third-party replacement cost calculator, or by hiring an assessor, and he suggests getting multiple opinions to ensure accuracy. When calculating the value of personal belongings, Silverstein recommends keeping a photo record and documenting items in a spreadsheet or app, along with receipts or current values. He notes that expensive items such as jewelry, art, and décor should be professionally assessed, and that liability coverage should be sufficient to protect all assets. He also advises keeping this information stored securely online or in a safe place so it can be easily accessed and updated.